When you start trading, you speedily learn that a position can close automatically as soon as it hits the stop loss.
If you have placed the latter properly (eg 1% risk), you do not, in principle, have to intervene.
Another solution is to hold position in forex in the opposite direction to your position (eg if you spot a signal that complies with your entry rules).
In this case, the trade will close automatically as soon as you open your new position.
Note that some brokers sometimes allow the opening of two positions in reverse. Make sure that your first trade is closed when you hold the position in forex trading the second.
You can also choose to manually close your position, for example, late in the day for day trading, or Friday night for swing trading. You thus avoid the gaps of the night or the weekend.
Finally, your position can also close automatically if you have set a profit level.
Keep a trade open:
If none of the situations are just mentioned arises, your trade therefore remains trade stay open.
But for how long? In fact, everything will depend on the time horizon on which you base your portfolio management and the strategy you follow.
Suppose, for example, that you decide to invest in the medium term (around a few months).
You will therefore mainly rely on a daily chart to carry out your technical analysis.
The movements will necessarily be slower, your stop further, and your position can therefore remain open for several months without any problem.
Ditto for the long term. You can invest in a business by buying stocks and keeping them for 10, 20, 30 years (assuming the company is still there, of course).
In theory, you can therefore keep an open position all your life. But in practice, this might not be the case always.
If keeping an open position for a very long time fits perfectly into a dividend- based strategy for stocks, it is not as useful for other financial instruments. Be it currency, derivatives, or whatever.
In some cases, it’s even a good way to nibble your capital on fees of all kinds.
The real question is not how long you can keep an open position, because it doesn’t matter.
The main thing, you will understand, is above all to know when to close it.
And this is one of the most important elements to take into account in your trading plan